Compensation fund
May 10, 2011
The president of Tokyo Electric Power (TEPCO), Masataka Shimizu, on Tuesday submitted a request for Japanese government aid in compensating those affected by its stricken Fukushima nuclear power plant.
In the submission to the trade and industry minister Banri Kaieda, TEPCO said that the company faced "an extremely severe situation regarding fund-raising such as loans from financial institutions, not to mention bond issuance."
The company said it needed state help to continue operating and avoid a scenario that threatened "fair and prompt compensation to affected people and causing fears over stable supply of electricity."
TEPCO's president told reporters that the company would undertake bold restructuring measures to help pay for damages caused by the world's worst nuclear accident for 25 years.
Government considering assistance package
Analysts have forecast that TEPCO faces compensation claims totalling around 10 trillion yen, equivalent to about 125 billion euros. The Japanese government is expected to decide on an assistance package for TEPCO later this week.
The government has said TEPCO must undertake greater restructuring in order to win its support. On Tuesday, the daily newspaper Yomiuri Shimbun reported that the government was also considering taking an equity stake in TEPCO.
TEPCO has also announced new cost-cutting measures to help pay for compensation payments to victims of the nuclear accident, including pay cuts for senior executives.
TEPCO undertake cost cutting measures
TEPCO's president Shimizu and seven other high-ranking directors will return their renumeration "for the time being" and the company will look at selling securities holdings and real estate to create "as much funds as possible," the company has announced.
The beleaguered firm also said it was struggling with the costs of extra power generation, including an additional trillion yen for fossil fuel, with its Fukushima Daiichi plant and other facilities offline following the disaster.
The cooling systems of the Fukushima Daiichi Plant were crippled by the March 11 tsunami that followed Japan's biggest earthquake on record. The disaster caused the reactors to overheat, triggering explosions and the release of radioactive materials. It forced the evacuation of tens of thousands of people from their houses, businesses and farms in a 20-kilometer radius around the plant.
Nearly 100 evacuees from a village near the Fukushima plant briefly returned home Tuesday wearing radiation suits, masks and goggles to pick up their personal belongings.
Almost two months since the disaster struck, the authorities and TEPCO are still battling to bring the facility to safety.
Author: Sherpem Sherpa (AFP, dpa)
Editor: Anne Thomas